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Indirect Tax Laws

Notes 6.4 Rectification of Mistake

1. With a view to rectifying any mistake apparent from the record, the Central Excise Officer
who passed any order under the provisions of this Chapter may, within two years of the
date on which such order was passed, amend the order.
2. Where any matter has been considered and decided in any proceeding by way of appeal or
revision relating to an order referred to in sub-section (1), the Central Excise Officer
passing such order may, notwithstanding anything contained in any law for the time
being in force, amend the order under that sub-section in relation to any matter other than
the matter which has been so considered and decided.
3. Subject to the other provisions of this section, the Central Excise Officer concerned:

(a) may make an amendment under sub-section (1) of his own motion; or
(b) shall make such amendment if any mistake is brought to his notice by the assessee
or the Commissioner of Central Excise or the Commissioner of Central Excise
(Appeals).
4. An amendment, which has the effect of enhancing the liability of the assessee or reducing
a refund, shall not be made under this section unless the Central Excise Officer concerned
has given notice to the assessee of his intention so to do and has allowed the assessee a
reasonable opportunity of being heard.
5. Where an amendment is made under this section, an order shall be passed in writing by
the Central Excise Officer concerned.

6. Subject to the other provisions of this Chapter where any such amendment has the effect
of reducing the liability of an assessee or increasing the refund, the Central Excise Officer
shall make any refund which may be due to such assessee.
7. Where any such amendment has the effect of enhancing the liability of the assessee or
reducing the refund already made, the Central Excise Officer shall make an order specifying
the sum payable by the assessee and the provisions of this Chapter shall apply accordingly.

6.5 Challenges before the Service Tax Administration in India

Service tax administration in India has before it multi-dimensional challenges. Few of them are
related to the very nature and growth of service sector in the economy and others relate to
procedural aspects of the service tax collection.
The growth of service sector at higher rate offers opportunities as well as challenges to bring
under the tax net hitherto uncovered services. This offers tremendous revenue potential to the
Government. It is expected that in due course Service Tax would reduce the tax burden on
international trade (Customs duty) and domestic manufacturing sector (Excise duty). So a planned
growth of service tax would be commensurate with the goals of economic liberalization and
globalization. This process requires levy of taxes on new services without substantial rise in the
rate or cost of collection.
The administration of service tax requires a separate comprehensive legislation along with
distinct administrative machinery exclusively devoted to the collection of service tax. That
alone would bring in greater clarity, streamlined procedures, greater taxpayer assistance and a
new tax culture of voluntary compliance. The twin goal of revenue maximization introduction
of the culture of voluntary tax compliance also throw up major challenge before the service tax
administration in the country.

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